The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Deputy Prime Minister says The Bahamas is “not concerned” about the potential threat of increased international regulatory pressures and scrutiny due to the growth of its digital assets industry.

Chester Cooper, also minister for tourism, investments and aviation, dismissed fears that the build-out of financial technology (Fintech), cryptocurrency and other digital assets businesses will attract negative attention from financial services supervisory agencies.

“We’re not concerned. We’ve innovated, we’ve pivoted. We’ve come under the most severe attacks since 2000. I expect that the spirit of innovation is going to continue and we are going to thrive,” Mr Cooper said, speaking at IX Capital’s fifth-year anniversary in The Bahamas.

“When we talk about an ecosystem, we talk about all of the attributes I mentioned before; the political, regulatory, legislative stability, and predictability, as well as the ability to find very experienced talent that’s been resident in our financial services wealth management industry for decades.

“We’re now using that talent to pivot, to learn new skills about CFDs (contracts for difference) and digital assets, and anything else that’s cutting edge and revolutionary in financial services. Building on that experience, we are going to continue to be leaders in international financial services.”

A contract for difference (CFD) is known as a derivative transaction in international financial services. It is a legally-binding agreement between two parties, a “buyer” and “seller”, stipulating that the former will pay to the latter the difference between the current value of an asset and its value at contract time.

The Bahamas has sought to build on the arrival of FTX Digital Markets, the world’s second largest cryptocurrency exchange, last year as well as its Digital Assets and Registered Exchanges (DARE) Act to develop a regulatory framework that will attract more investors to its financial services industry.

Robert Berkeley, chief executive of Infinox Capital, the parent of IX Capital, said: “I think with any regulation around the world you’ve got to understand your target market; where that fits and how it interacts. To be a truly global firm, you’ve got to understand all the different regulations and how they interact.”

Infinox deals with 15 regulatory agencies as a result of its worldwide operations. Each has a different governance structure that meets the necessary supervisory requirements. “It is a challenge, but that is life. You’ve got to deal with these things and work with these things,” Mr Berkeley added.

“Where The Bahamas is now compared to The Bahamas five years ago is a real difference. I have met with three banks in the last couple of days, and the way they do business, the way they deal with digital currency and the way they view broker/dealers is so different from when I first came five years ago.

“Five years ago you couldn’t open a bank account. Now that co-operation and collaboration is there which will allow for our bank accounts to be open.”